The Supreme Court of India on Tuesday granted the Central Bureau of Investigation (CBI) permission to register six more cases concerning the fraudulent activities targeting homebuyers. This decision involves the ongoing investigation into an “unholy nexus” between banks and property developers, affecting real estate projects in prominent cities like Mumbai, Bengaluru, Kolkata, Mohali, and Prayagraj.
A bench consisting of Justices Surya Kant, Ujjal Bhuyan, and N. Kotiswar Singh directed the CBI to proceed with its investigations. The agency successfully completed preliminary inquiries into various builders, except for Supertech Ltd, which operates outside the national capital region (NCR).
During the court proceedings, Additional Solicitor General Aishwarya Bhati, representing the CBI, revealed that the inquiries had established sufficient grounds for registering regular cases against the implicated developers. She highlighted that the agency aims for swift progress in its investigations and intends to conduct necessary searches and seizures in relation to the matter.
The Supreme Court, in a previous ruling on July 22, allowed the CBI to register 22 cases that focus specifically on the fraud surrounding developers and banks in the NCR area. This latest ruling enhances the agency’s mandate to investigate beyond Delhi to wider geographical areas.
The 22 cases are tied to builders operating in the NCR, including developers in Uttar Pradesh and Haryana. They have received bank loans through the controversial subvention scheme, wherein banks disburse funds directly to builders. Under this arrangement, builders must pay Equated Monthly Instalments (EMIs) until the delivery of apartments to buyers.
However, many builders have defaulted on these payments, causing banks to shift the financial burden onto homebuyers, demanding EMIs for properties they have yet to possess. The Supreme Court has expressed concern regarding the systemic issues in this practice, as documented in numerous complaints from over 1,200 homebuyers who participated in subvention plans.
The court’s frustration over the collaboration among development authority officials, banks, and builders is evident. It recognized a prima facie connection between various renowned banks and builders involved in the fraud, particularly in regions like Noida, Gurugram, Yamuna Expressway, and Greater Noida.
The amicus curiae, appointed to advise the court, presented findings that designated Supertech Ltd as the primary perpetrator of homebuyer fraud. Records indicate that Corporation Bank has loaned over ₹2,700 crore to builders through these subvention schemes, exacerbating the financial struggles of numerous homebuyers.
The alarming report unveiled that Supertech Ltd alone amassed a staggering loan amount totaling ₹5,157.86 crore since its inception in 1998. Such figures paint a troubling picture of the challenges facing homebuyers who believed they were securing their dream homes.
Further complicating the situation, the Supreme Court previously allowed the CBI to register five preliminary inquiries focused on builders and projects in NCR locations such as Noida, Greater Noida, Gurugram, Yamuna Expressway, and Ghaziabad. The inquiries are set to investigate how these developers managed to evade accountability while impacting the financial security of countless homebuyers.
As the CBI sets out to tackle these newly registered cases, many homebuyers await resolutions to their grievances. The Supreme Court’s commitment to uncover the extent of this fraudulent nexus puts a spotlight on the need for transparency and ethical practices in India’s real estate sector.
